Catalent Inc (CTLT)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -749,000 | -163,000 | 730,000 | 828,000 | 394,000 |
| Interest expense | US$ in thousands | 23,000 | 49,000 | 38,000 | 52,000 | 24,000 |
| Interest coverage | -32.57 | -3.33 | 19.21 | 15.92 | 16.42 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-749,000K ÷ $23,000K
= -32.57
Interest coverage is a financial ratio that measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Looking at Catalent Inc's interest coverage ratio over the past five years, we can see that there has been significant fluctuation. In 2020, the interest coverage ratio was relatively stable at 16.42, indicating a comfortable ability to cover interest expenses. However, there was a sharp decline in 2021 to 15.92, which may have raised concerns about the company's ability to meet its interest obligations.
The years 2022 and 2023 saw a notable improvement in the interest coverage ratio, reaching 19.21 and -3.33, respectively. The negative interest coverage ratio in 2023 raises a red flag, suggesting that the company's operating income may not be sufficient to cover its interest expenses.
The most recent data for 2024 shows a significant drop in the interest coverage ratio to -32.57, indicating a substantial decline in the company's ability to cover interest expenses. A negative interest coverage ratio is a cause for concern as it implies that the company's operating income is insufficient to cover its interest obligations, potentially signaling financial distress.
In conclusion, Catalent Inc's interest coverage ratio has shown considerable variability over the past five years, with a negative trend in the most recent data for 2024. This indicates a deteriorating ability to cover interest expenses, which may warrant further investigation into the company's financial health and risk profile.
Peer comparison
Jun 30, 2024